TaxTMI 
TaxTMI 
2024 (4) TMI 822
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....e officers of Directorate General of Central Excise Intelligence, Zonal Unit, Mumbai that the respondents were engaged in providing "in-flight catering services to International and Domestic airlines". The respondents were observed to have short paid the service tax by undervaluing the taxable services which were covered under Section 66E (i) of Finance Act, 1994. Vide the show cause notice No. 594 dated 08.02.2017, the department alleged that supply of food and beverages is covered under the head "Outdoor Catering Services" and all other ancillary services are incidental to the main services of outdoor catering services. The respondents are alleged to have deliberately raised separate invoices for supply of food and beverages (in short F&B....
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....44) of Finance Act, 1994 which deals with situation where supply of food is the part of the reduced activity. The Respondent themselves have declared the category of service as "Outdoor Catering", however, have raised separate invoices for supply of food and beverages and for other services of transportation uploading, handling and storing of such food beverages. This is a deliberate act of the respondent to evade payment of service tax on the proper value of services including the value of food and beverages. Learned Authorized Representative further mentioned that w.e.f. 01.07.2012 service tax is leviable on value of all services under Section 66B except those as specified in negative list in section 66(D) of the Finance Act irrespective ....
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....the respondent is merely the supply of food. The transportation and handling thereof are incidental to the supply of food and not to the activity of outdoor catering as has rightly been held by the adjudicating authority below. 6. It is further impressed upon that the contract with the airline is two fold divisible contract, distinctly identifiable and value of consideration is also separately defined. The dominant intention from both these agreements is that the respondent has agreed to supply food to the airlines. The said supply of food is also not dependent on the other services as the airlines have an option of not availing the transport services from the caterer themselves. Learned Counsel impress upon that the service tax is not pay....
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....es and perusing the decisions relied upon by the respondent, we observe and hold as follows:- The activity rendered by the assessee-respondent is alleged to be outdoor catering services. Foremost we need to know the definition of outdoor catering services. Section 65 (76a) of Finance Act defines outdoor caterer to mean a caterer engaged in providing services in connection with catering at a place other than his own but including a place provided by way of tenancy or otherwise by the person receiving such services. The definition of caterer is nowhere defined in the act. However, as per dictionary meaning caterer is a person engaged in providing, laying and serving food. Caterer is a person who makes and serves food. Later section 65 (24) o....
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....r substitute items. Thus he has no role to play and hence there is no element of service except the heating of cooked food and serving the food and beverages. In fact the service component in a restaurant is more than the service component in a train. 5B The property in the goods passes from IRCTC to Indian Railways when the food is loaded in the trains. The moment the food is loaded, the food belongs to Indian Railways. The fact that the food is served while the train is moving through another State is immaterial. It is not possible to accept that property in goods is transferred only when the food is served to the passenger as it would lead to impossible situations." Even Bombay High Court in the case of Narang Hotels and Resorts vs. ....
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....hich also includes the cost of transporting the food articles constitutes service Therefore, to this extent alone, the assessee is liable for service tax and for the entire cost received from the Airlines. Hence mere has to be a bifurcation with regard to the sale of goods and the service provided. However, it does not empower the State Government to levy tax on the entire amount mentioned in the bill. The entire sale price includes the transportation charges also and out of that sale price what is the service aspect and what is the sale aspect requires to be decided by the authorities. It is only thereafter that sales tax could be imposed on the cost of the food articles arrived at and the remaining extent including transportation is to be....